Will this city be Australia's Silicon Valley or its Detroit?

Will this city be Australia's Silicon Valley or its Detroit?

Manufacturing has been declining in importance in Australia for decades as successive governments rolled back trade barriers and exposed firms to intense foreign competition.

Behind closed doors at City Hall, Geelong's eccentric mayor sits searching for an analogy to put into perspective the punishing job losses battering his city.

Darryn Lyons runs his fingers through his blonde mohawk - the man leading this Australian manufacturing hub was once a paparazzo and reality TV star in Britain - before settling on a way to describe how the departure of companies such as Alcoa Inc and Ford Motor Co. will hurt.

(Additional reporting by Wayne Cole)

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Image: The Alcoa Aluminium Smelter is pictured before sunrise at Point Henry in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

"I relate it a little bit to the prehistoric age, really. The dinosaurs have been going throughout the world for the last seven or eight years," he said, referring to the struggle to adapt in the face of growing competition from Asia and then the global financial crisis.

Geelong, 75 km (46 miles) south of Melbourne, is a microcosm of the economic crossroads at which Australia stands.

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Image: The Incitec Pivot company fertilizer and explosive chemical plant is pictured at sunset in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

The steps authorities and industry leaders take here - securing next-generation defence contracts or incubating carbon fibre production - will be closely watched to see if the city becomes Australia's Silicon Valley or its Detroit.

Australia largely avoided the turmoil of the global financial crisis by leveraging Chinese demand for its abundant natural resources.

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Image: A worker at a beach-front attraction, the Giant Sky Wheel, goes on a break at sunset.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

The mining boom, however, is slowing and a high Australian dollar has helped drive its manufacturing base overseas.

The announcement last month by U.S. aluminium producer Alcoa that it would close its Point Henry smelter, putting 600 people out of work, was just the latest in what Lyons has called a "tsunami" of manufacturing job losses across the country.

Will this city be Australia's Silicon Valley or its Detroit?

Behind the plant lies the empty Moolap salt works. Across the bay sits AvalonAirport, where national carrier Qantas in November announced the closure of a maintenance facility, shedding 300 jobs.

The decision last year by Ford to cease manufacturing in Australia by 2016 will take 600 jobs from Geelong and, together with similar moves by Toyota and General Motors in other parts of the country, signalled the end of Australia's rich history of car manufacturing.

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Image: A woman walks through the main shopping district in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

Alcoa's decision to shut the 50-year-old smelter was taken after a two-year review found no prospect of it becoming financially viable.

Australia was once one of the world's biggest aluminium producers, but has slipped to fifth place as production costs climbed and prices dropped.

By some estimates, more than 10 percent of Geelong's population will be affected by the job losses, a fact made evident by the empty shopfronts dotting the city and the "For Sale" signs sprouting across its suburbs.

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Image: A gate blocks an entrance to a shopping mall car park in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

Adam Oates, 42, has worked at Point Henry for nearly his entire adult life. His father and father-in-law worked for Ford, he said in an interview at his home, and he always assumed he would have the sort of job security they enjoyed.

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Image: The Ritz Flats, part of an abandoned pub, stand in the main shopping area of Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

Value-added products such as food, tourism and education are seen as huge growth opportunities, as the investment phase of the mining boom dies down over the next three years, leaving a gaping hole in the national economy.

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Image: A suburban street is seen in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

The ups and downs of Geelong's economy have long mirrored those of the country. It rose and fell in the 19th century on booms in wool and gold, before transitioning into manufacturing in the 20th century.

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Image: The road leading to the Shell Oil Refinery is seen at sunset in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

Jane den Hollander's office at DeakinUniversity in Geelong is illustrative of that change - it started life as a sheep shed and is now a part of the university's Australian Future Fibres Research and Innovation Centre.

Will this city be Australia's Silicon Valley or its Detroit?

The centre is a A$102 million research hub and home to a pilot plant called Carbon Nexus that Deakin says is the world's first research plant capable of producing large scale amounts of industrial and aerospace quality carbon fibre.

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Image: The Alcoa aluminium smelter is seen at Point Henry in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

Hollander, Deakin's vice rector, identified agriculture as a short-term possibility for those without advanced skills in Geelong before mooting education, health care and information technology as sectors being promoted by the university.

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Image: The Incitec Pivot fertilizer and explosive chemical plant is seen at sunset in Geelong.Photographs: Jason Reed/Reuters

Will this city be Australia's Silicon Valley or its Detroit?

The Land 400 is a A$10 billion project intended to produce a suite of new armoured vehicles, which the army describes as the largest, most expensive and most complex major capability project in its history.

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Image: A shift worker at the Alcoa aluminium smelter leaves the plant during a 12-hour shift change before sunrise at Point Henry.Photographs: Jason Reed/Reuters